22 October 2015, Lagos – World oil prices rose Thursday on bargain-hunting after a sharp decline the day before, although analysts said the market remains hobbled by an oversupply.
Brent North Sea crude for December delivery was also up 46 cents at $48.31 a barrel in London afternoon deals.
The market sank Wednesday as an increase in US crude stockpiles provided fresh fuel for concerns about the global oversupply.
Inventory data released Wednesday showed a bigger than expected increase in US crude stockpiles, fuelling worries over a global glut which have depressed prices for more than a year.
The US Energy Information Administration said the country’s commercial crude oil inventories jumped by eight million barrels to 476.6 million in the week ending October 16.
The increase, which typically indicates weaker demand in the world’s number one economy, was more than double market expectations.
Oil also took a hit at the start of the week when China said gross domestic product grew in the third quarter at its slowest pace in more than six years.
“Worries about the health of the Chinese economy continue to batter commodities prices. In the US, crude stockpiles surged… and supply glut remains a concern,” said Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at professional services firm EY.
Gupta said a meeting between OPEC and non-OPEC oil producers on Wednesday “did not produce any meaningful results as no potential production cuts were addressed”.
Russia had said it was prepared to discuss a reduction with members of the cartel at the meeting in Vienna.
Gupta said the market would be looking at a December 4 policy-setting meeting of the Organization of the Petroleum Exporting Countries which is expected to “provide vital clues about price development in the medium term”.
OPEC, which includes Saudi Arabia, Kuwait and the United Arab Emirates, has maintained high production levels despite the oil price decline, as members try to maintain market share.